A social media post on the financial performance of Bank of Ghana by one @scottbolshevik, which is gaining traction, depicts the Bank as a loss-making entity in the last six years.
However, our checks revealed that this is FALSE. In fact, the true picture is below:
Profit/Loss for the year(‘000)
2014: Profit GHS 899,353.00
2015: ProfitGHS1,020,037.00
2016: Profit GHS 709,482.00
2017: Loss GHS1,637,532.00
2018: Loss GHS 793,085.00
2019: ProfitGHS1,800,906.00
2020: ProfitGHS1,572,794.00
2021: ProfitGHS1,236,861.00
2022:LossGHS60,809,753.00
2023:LossGHS10,548,510.00
Further checks revealed that the Bank of Ghana fully adopting the IFRS global standards of reporting in 2018 also had impact on impairment treatment, which also impacted the balance sheet negatively. The adoption of IFRS 9 in particular brought changes to the way the Bank treated impairment provisioning in the books. Prior to 2018, data was on weaker IFRS standards.
In 2017 and 2018 also, the liquidity support provided to failed banks under the NDC regime also had impact on the financial performance of the Bank of Ghana. Further checks also revealed that there has been no liquidity support to Banks under the current regime. All the failed banks that needed liquidity support were under the previous era.
Central banks, unlike commercial banks and other business entities are not profit led, as they put purpose over profit. Central banks exist to provide public good of maintaining stability in the general level of prices, and often make losses when achieving their mandate.
The Bank of Ghana, in 2023 for instance, incurred more than 8 billion Ghana cedis on its Open Market Operations in order to tame inflation, which had peaked at 54.1 per cent at end-December 2022. Inflation dropped to 23.2 per cent at end-December 2023 due to the aggressive posture of the Bank in mopping up excess liquidity from the economy.
This contributed significantly in the reported loss of a little over 10 billion cedis in the 2023 financial statements.
